Real Estate Review of 2008 by Joyce Mitchell, Big
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2/6/2009
With the 2008 statistics in from our MLS, now is a good time for a recap of 2008.
Though we are not suffering the identical market conditions of the large metropolitan cities in California, Nevada, Arizona, Florida and others throughout our nation, the greater Bigfork market is certainly feeling the effects. Looking back, I can best describe the 2008 market as a time of “denial”. Many sellers were simply caught blindsided by the impact of depressed markets in other states and the tsunami soon to affect housing prices. Buyers made offers based on the markets they came from. Sellers countered at what they felt were “reasonable”. Many offers never came together.
The local real estate market relies heavily upon visitors from other states as, over the years, the Flathead Valley has become a strong second home market. Typically, we have two shifts of visitors during our summer months. The first shift consists of mostly younger families travelling by road setting their sights on visiting Glacier National Park and the many forested areas and lakes of the Northwest. With 2008’s fuel cost increases, many of them elected to closer to home. Some of this decline has been offset by an influx of Canadians enjoying the benefits of the exchange rates with the devalued US dollar. This first shift is long gone by September 1st as they get their children back home for school. The second shift of visitors are more mature and are interested in getting away from the 100 plus degree temperatures of their home states. They are more likely to be golfers than camping enthusiasts; more likely to be seriously interested in seeking second homes in the Bigfork area.
The 2008 real estate market for the Greater Bigfork area shows significant drops in sales over 2007. Overall, non-waterfront residential sales in numbers are down 31% with total dollar volume down 41% and the average sale price down 14% over last year’s figures to date. More significant are the dismal figures for residential land sales at 50% down in numbers sold with 57% down in dollar volume over the same period last year. In 2006, I sensed we were heading toward a land glut with the seemingly unstoppable approvals of so many new subdivisions throughout the valley. Developers are seeing increases in impact fees and infrastructure costs while being forced to lower prices for home sites to be competitive in a down- spiraling market.
The good news is that Montana is in the lowest 10 states in terms of foreclosures. The bad news is that our buyers come from the top 10 foreclosure states. Why, you ask? We simply do not have mega-builders who have built hundreds of spec homes that are now sitting empty, and subject to vandals, or are now owned by the banks. This is not to say that we will not see a rise in the foreclosure rate, but it will be more closely tied to our overall current economic downturn and not so much due to overbuilt spec homes and high inventories. Another important note is that Montana banks tend to be more conservative, probably from a history dating back to the earlier agricultural and logging days when one would lend with caution due to variables such as droughts, floods, hail, pest infestations and fires. Though the State of Montana can boast, at this writing, an unemployment rate of 5.4%, well below the current national rate of 7.5%, the Flathead Valley, however, is harder hit due to its dependency on the second home market and related businesses.
Depressing as all this may sound (this certainly is not coming to you as shocking news) you should know one of many things that I love about Montana. Its people have true grit. They are the rugged individuals, the pioneers, the loggers, the miners, the farmers and the cowboys who have labored in the worst of weather and circumstances and have the guts and strength to come back stronger than ever. While our country is being tested, I am happy to be in a state where people take care of their neighbors; look you square in the eye, and say “hang on tight, my friend….we are going to get through this!”
Bp | Bigfork, MT